Back in January we told you that British insurer Legal & General Group Plc was looking for a potential buyer in order to offload its stake in IndiaFirst Life Insurance Company Limited. Now the search is over, with US private equity firm Warburg Pincus LLC stepping in.
Announcing the development, Legal & General said it has reached an agreement in principle with a Warburg Pincus affiliate for the sale worth INR710.54 crore, or approximately £79 million. Subject to the approval of regulatory authorities, the transaction will see a pre-tax profit of around £45 million for Legal & General on disposal.
The divestment is expected to complete by the end of 2018.
“Legal & General is proud to have been a founding member of IndiaFirst Life and to have helped steer the company to its current position in the market, aided by the strong support of our joint venture partners, Bank of Baroda and Andhra Bank,” said group commercial director Simon Burke. “Legal & General has refocused its insurance business in recent years on the UK and the US and as a consequence we have disposed of a number of operations, including our businesses in the Netherlands, Ireland, France, Egypt, and the Gulf.
“We are now following this strategy in relation to our stake in IndiaFirst Life. We are delighted to have reached an agreement in principle with Warburg Pincus, subject to regulatory approvals.”
For IndiaFirst Life managing director and chief executive R.M. Vishakha, Legal & General has been “an extremely supportive partner and an integral part” of the Mumbai-headquartered firm’s growth journey.
“As we enter a new phase of growth, we welcome Warburg Pincus as a shareholder to support our drive towards value creation,” said the executive, who has held his positions since April 2015. “We are truly fortunate that both our shareholding banks are confident and supportive of our plans. We look forward to continued strong growth under the combined guidance of our shareholders."
Founded in 2009, IndiaFirst Life is a joint venture between Legal & General (26% stake), Bank of Baroda (44%), and Andhra Bank (30%). With over INR12,622 crore (about £1.4 billion) of assets under management as of the end of March 2018, it is present in more than a thousand cities across India offering health, protection, retirement, savings, and wealth management products.
“IndiaFirst Life has demonstrated remarkable performance over the last few years, and we are excited to be partnering with Bank of Baroda and Andhra Bank to support the continued growth of the company and to help create value for all stakeholders,” said Mumbai-based Narendra Ostawal, managing director at Warburg Pincus. “We look forward to backing R.M. Vishakha and the management team of IndiaFirst Life, and supporting them to create one of India’s leading life insurance companies.”
